Cruise Ends Stock Buybacks For Employees Amid Ongoing Safety Crisis

Table Of Content

• Laid-off Cruise worker dishes on lingering impact of San Francisco crash on robotaxi company
• Cruise lays off nearly a quarter of its staff after grounding its robotaxi fleet
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• Media Services
• Cruise looks to shed two SoMa office buildings as it pulls back from San Francisco
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• Massive Layoffs Hit Troubled Robotaxi Developer Cruise

GM has lost $8.2 billion on Cruise since 2017 but expects to lose much less going forward. In a recent call with investors, the automaker didn’t share specific cash reductions, but chief financial officer Paul Jacobson said it would likely amount to “hundreds of millions” of dollars. “We knew this day was coming, but that does not make it any less difficult—especially for those whose jobs are affected,” he wrote.

Laid-off Cruise worker dishes on lingering impact of San Francisco crash on robotaxi company

A barrage of safety concerns and incidents have plagued Cruise, majority-owned by GM, since it received approval in August for round-the-clock robotaxi service in San Francisco. Waymo, a division of Google’s parent company Alphabet, is still offering a driverless taxi service in San Francisco. The industry’s leaders consider the city to be a critical proving ground for the technology’s potential and the viability of the $8 trillion market that it could create. Cruise’s troubles can be traced to an Oct. 2 crash when a car hit a woman at an intersection in San Francisco and flung her into the path of one of Cruise’s driverless taxis. The Cruise car dragged the woman some 20 feet before pulling to the curb, causing severe injuries.

Cruise lays off nearly a quarter of its staff after grounding its robotaxi fleet

Since Google started working on the first autonomous vehicle more than a decade ago, dozens of companies have poured tens of billions of dollars into building software and persuading regulators to permit testing on roads around the country. On Wednesday, as first reported by Reuters,, the company said it had parted with nine top executives, including leaders in legal, government affairs, commercial operations, and safety and systems, as part of a safety review triggered by the San Francisco crash. Craig and I believe this is a necessary step, and our leadership team and the board are fully aligned with how our go-forward U.S. staffing needs will map to the priorities ahead of us, and set up Cruise for the long term.

Massive Layoffs Hit Troubled Robotaxi Developer Cruise - WIRED

Massive Layoffs Hit Troubled Robotaxi Developer Cruise.

Posted: Thu, 14 Dec 2023 08:00:00 GMT [source]

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The company had 3,800 employees before Thursday's cuts, which also follow a round of contractor layoffs at Cruise last month. Affected employees will receive paychecks until Feb. 12 and at least an additional eight weeks of pay, plus severance based on tenure. Most of the job cuts are in corporate and commercial roles, which have become less important since the company voluntarily suspended all its driverless operations across the country in October.

In a blog post published on Wednesday, the company also outlined some of the measures it plans to take, including hiring a Chief Safety Officer who will report to Vogt, and bringing in both a law firm and a third-party engineer firm to investigate the October 2 incident and its aftermath. The embattled self-driving car subsidiary of General Motors faces an uncertain future after California regulators shut down its robot taxi service in the state. Many rank-and-file employees were blindsided by much of the news that came out of the dragging incident and the reports about the company hiding the footage, according to the employee, who asked to remain anonymous because of fears of retaliation. A further 43 jobs were cut at the company’s Sunnyvale office and 18 jobs at its South San Francisco warehouse location.

Cruise issued Wednesday a recall for 950 vehicles equipped with its autonomous vehicle software following the October 2 crash that left a pedestrian, who had initially been hit by a human-driven car, stuck under and then dragged by one of the company’s robotaxis. The subsidiary announced the cuts on Thursday in a letter to Cruise’s 3,800 workers from its president and chief technical officer, Mo ElShenawy, who wrote that the layoffs were not the fault of the workers. The job cuts come a day after Cruise confirmed that nine key leaders are no longer with the company amid an ongoing investigation into an October crash involving one of its driverless robotaxis that forced it to suspend operations. After the incident, the California Department of Motor Vehicles suspended Cruise’s permit to operate driverless cars in the state.

General Motors has absorbed huge losses during the development of the driverless service that was supposed to generate $1bn in revenue by 2025, with plans to expand beyond San Francisco. What's nextAs mentioned, in a few moments, you will receive an email letting you know whether or not you are affected by this staffing reduction, and if you are impacted, you will get details about what happens next. I am so sorry we have to do this by email, as I would prefer that we have a conversation with each of you. Unfortunately, given the scale of this change, this approach allows us to communicate to those who are impacted at the same time.

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On Thursday, Cruise abruptly ended a program allowing employees and alumni to sell company stock back to its corporate parent, General Motors. The company is still carrying out limited supervised driving in some markets, as well as mapping and supervised testing, as part of technical improvements. "When there is an unreasonable risk to public safety, the DMV can immediately suspend or revoke permits," the California DMV said in a statement.

Massive Layoffs Hit Troubled Robotaxi Developer Cruise

Earlier this month, according to audio leaked to Forbes from an all-hands meeting, CEO Kyle Vogt confirmed that staff layoffs were coming. Today, we are making staff reductions that will affect 24% of full-time Cruisers, through no fault of their own. We are simplifying and focusing our efforts to return with an exceptional service in one city to start with and focusing on the Bolt platform for this first step before we scale. These impacts are largely outside of engineering, although some Tech positions are impacted also. As you might have learned, yesterday, we took action to part ways with several SLT members.

Cruise executives said at the time they wanted to take a measured business approach that preserves cash and improves safety culture in an attempt to put GM’s troubled autonomous vehicle subsidiary on the right path. General Motors’ troubled Cruise autonomous vehicle unit is cutting over 900 jobs, about a quarter of its workforce, as it moves to reduce costs and remake itself after a grisly accident in San Francisco and subsequent regulatory scrutiny. Early last month, the company recalled all its robotaxis, which it had been testing on roads in California, and regulators accused Cruise of hiding the severity of the incident.

Cruise used all-electric Chevy Bolt vehicles, which have been specifically manufactured to support its self-driving system, in its robotaxi fleet. The company intended to shift toward a custom-built autonomous vehicle called the Origin. The layoffs come just a day after nine senior leaders (SLT) at Cruise, who worked in its commercial operations, legal and policy departments, were dismissed by the company’s board. COO Gil West and David Estrada, who was head of government affairs, were among that group. Vogt resigned as CEO last month, which was soon followed by the departure of his Cruise co-founder Daniel Kan. Earlier this week, Cruise announced that nine top executives were being fired amid a probe into the company’s safety practices, including its chief operating officer and chief legal officer.

"But what I can do is commit to providing more details within the next three weeks. So, importantly that's not when layoffs would occur for full time employees, that's when we're going to give you an update on what that timeline might be." Cruise CEO Kyle Vogt appeared to confirm that the company would have to go forward with layoffs of full-time staff, Forbes reported, citing audio of a Monday all-hands meeting that it had obtained. The workers impacted in the announced layoffs weren't directly employed by Cruise, but rather employees contracted through third-party vendors and staffing agencies. Days later Cruise paused all of its driverless operations in other markets where it had more limited service, including Austin, Houston and Phoenix. Carnival Corp.’s Princess Cruises this week canceled 11 fall sailings on its Diamond Princess, saying it couldn’t provide the level of service customers expect amid ongoing labor shortages.

The so-called “Recurring Liquidity Opportunity,” or RLO, was implemented in the wake of the departure of Cruise’s previous CEO. Former Cruise employees have told Forbes that they understood that it was meant to shore up company morale in 2022 and demonstrate to the company’s workforce that GM backed Cruise so much that it was willing to be a regular private buyer of the stock. Craig Glidden, the automaker’s executive vice president of legal and policy and a Cruise board member, will serve as a president and continue as chief administrative officer.

A few days prior to the grounding, the California Department of Motor Vehicles suspended the driverless unit’s deployment and testing permits. In the note, Elshenawy said the company is drastically scaling back its expansion plans, pausing work on its Origin shuttle and slowing down its road map to “focus on delivering the improvements to our tech and vehicle performance that will build trust in our AVs." According to a regulatory filing with state employment officials, Cruise laid off a total of 535 employees across the state, including 371 positions located in San Francisco. The majority of these—228 jobs—were centered at the company’s SoMa headquarters at 333 Brannan St., with 120 positions cut at Cruise’s 1201 Bryant St. office and 23 jobs at its servicing center at 640 Cesar Chavez St.

The company’s next few weeks will be critical in determining if and how the General Motors subsidiary will move forward in a developing market with rivals like Waymo, a subsidiary of Alphabet. Over the past four years, Cruise has brought in a modicum of revenue, leading to collective losses of about $6 billion. “As we build a better Cruise, we’re evaluating a variety of potential actions to ensure we operate at the highest standards of safety, transparency and accountability,” Cruise spokesperson Navideh Forghani said in a statement. “We are committed to keeping our customers, regulators, and the public informed throughout this process,” she added.

Cruise contractors were hit with layoffs after the self-driving car company had its permit revoked in California and subsequently suspended all of its driverless robotaxi operations nationwide. Cruise, the embattled self-driving car subsidiary of General Motors, said on Thursday that it would eliminate about 900 jobs, roughly a quarter of its work force, as the company looked to rein in costs after an October incident led California regulators to shut down its robot taxi operations. Specifically, the high-level terminations and rank-and-file reductions center on Cruise’s response to an Oct. 2 accident, where a woman was found critically injured and trapped underneath one of its self-driving vehicles. CNN reported that at the time, another car had initially struck the pedestrian, who had crossed the intersection when cars had the right of way.